Space-based cellular broadband startup to IPO via SPAC deal
AST & Science (“AST SpaceMobile”) is building what it says is the first and only space-based cellular broadband network accessible directly by standard mobile phones and IoT devices. Backed by an extensive IP and patent portfolio, the company says it will uniquely address the $1 trillion global mobile wireless services market by delivering seamless broadband cellular connectivity directly to unmodified, existing mobile phones, without any need for specialized hardware.
The company says its engineers have designed an entirely new proprietary form factor and deployment method that significantly reduce the time and costs associated with manufacturing, launching. and operating satellites. Leveraging proven technologies, its mega constellation of SpaceMobile satellites will provide 2G/3G/4G LTE/5G and NB-IoT connectivity to standard mobile phones and IoT devices and to enables access to SpaceMobile from any location – even inside – regardless of visibility to the satellites in orbit.
With an expected initial access to 1.3 billion subscribers of some of the world’s largest cellular operators, the company expects to be positioned to rapidly scale its revenue streams as it deploys its space assets for nearly complete global coverage, while benefitting from operating leverage and low maintenance capital costs via its super-wholesale, business-to-business model. Once deployed, the company’s services will meet the needs of at least five billion mobile subscribers who face broadband connectivity issues when moving in and out of cellular coverage, and will enable access by more than half of the world population that do not have internet on their phone.
“AST SpaceMobile’s low latency, space-based platform will allow hundreds of millions of people across the world to access high-speed, cellular broadband service in areas where there was previously no such service,” says Abel Avellan, Chairman and Chief Executive Officer of AST SpaceMobile. “Working directly with our strategic partners, we are on track in executing on phase one of our commercial launch as we set the stage to bring our game-changing space network for global mobile connectivity.”
The company and New Providence have secured a commitment for a $230 million private placement investment (“PIPE”) to be consummated at the closing of the transaction. The PIPE is being led by AST SpaceMobile’s strategic partners, including Vodafone, Rakuten (Japan leader in e-commerce, fintech, digital content and communications), and American Tower (a global leader in communications infrastructure), as well as UBS O’Connor and a broad base of financial institutions.
Alex Coleman, Chairman of New Providence says, “AST SpaceMobile represents a unique opportunity to invest in a pioneering company with revolutionary technology, access to a built-in customer base, and a flexible and scalable business model that addresses one of the largest challenges to global connectivity. Facing an extraordinary market opportunity, we believe AST SpaceMobile is poised for sustained growth as it executes its commercialization plan and ultimate expansion across the globe.”
Upon closing of the transaction, which is expected in the first quarter of 2021, AST SpaceMobile will become a publicly traded company, and it is expected that its common stock will be listed on the NASDAQ exchange under the symbol “ASTS.” Avellan will continue to lead the business post transaction. The combined company will have an implied pro forma enterprise value of approximately $1.4 billion and is expected to have an equity value of approximately $1.8 billion at closing.
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